Practical tips for small biz owners

The other day I bought an e-book (a book in PDF format) for $28. It’s a great book full of the information I was seeking. I could tell that the author really put a lot of thought and research into the writing of the book. I was so impressed, I told a friend about the e-book. He said, “Why don’t you email it to me?”

According to a study conducted by Digital Life America, “Only 40% believe downloading copyrighted movies off the Internet [without paying for them] is a ‘very serious offense’ – compared to the 78% who believe taking a DVD from a store without paying is a ‘very serious offense’.”

Somehow we’ve begun to believe that stealing a physical product is wrong, but downloading or sharing an electronic file without paying is okay.

People’s reasoning usually goes something like this: “The person who created the book/DVD/CD didn’t lose out on anything because the file didn’t cost them anything to produce and package.” People understand that printing a book, or duplicating and packaging CDs and DVDs cost money, but have the idea that making an electronic file doesn’t cost the author anything.

Let me tell you about my wholly-biased point of view: I just spent 20 hours editing a five-hour audio program on Internet Marketing, and another 12 hours writing the student guide that will accompany it. But that’s not all. It took me over 20 hours to design the class, 5 hours to teach and record the class, and another 8 hours to prep for each class session and help the students with their homework assignments. I have no idea how long it took me to research all the material for the class, as I’ve been studying the topic for over 10 years now. At a minimum, it took me 65 hours to create this audio product.

I typically charge $165 per hour for my coaching and consulting time. Since I had to spend 65 hours of my time to create the audio program, that $10,725 in billable consulting time that I could not give to my clients.

My mastermind group and I have been debating the pros and cons of selling this audio program as a downloadable file versus creating a physical product (5 CDs plus a 56-page printed book):

The cost to duplicate the CDs, print the book, package the set, and ship them out to customers is quite high per set.

Some people seem to enjoy being able to have instant access to self-study material they purchase on the Internet (though, according to MarketingSherpa, a surprising number of people never do open or read e-books they purchase).

Taking the risk of someone purchasing my downloadable MP3 audio and PDF book, then sharing those files with others, creates the possibility of my losing an extreme amount of money.

Lest you think I’m paranoid, let me offer you this statistic from my own website:

In 2006, I offered a free e-book and audio to people, but only if they registered for it. Over 700 people registered for it. But the files were downloaded a whopping 3,682 times. This is only for the number of people who went to my site to download the files; there’s no telling how many people emailed the files to their friends as an attachment.

Eventually I took the free offer off my site, completely disheartened and disillusioned by the number of people who would happily give the direct file-downloading URL to a friend, instead of the URL asking them to register.

Now I’m trying to decide whether to make my upcoming products downloadable, or go the physical products route. I’d love to know which one you’d prefer and what your thoughts are on file sharing.